Question 1: Consider an option on dividend-paying stock when stock price $30‚ the exercise price is $29‚ the risk-free interest rate is 5% p.a.‚ the volatility is 25%p.a. and time to maturity is 4 months. Assume that the stock is due to go ex-dividend in 1.5 months. The expected dividend is 50cents. a. b. c. what is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the results in the Appendix to this chapter to determine whether there
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throughout the year. The downfall to this approach is that the customer will likely not renew its membership in the following year. Another option a fitness club may offer would be to have the customer sign a year contract and bill the customer monthly instead of one lump some annually. This method is more effective because the customer is aware on a monthly basis of what he or she paying. This creates loyalty between the customer and the fitness center and studies suggest that the customer is more than
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Branding‚ Pricing‚ and Distribution Gary D. Tate Strayer University Marketing-500 Instructor: Brett Jordon 5/17/2012 Branding‚ pricing‚ and distribution are all integral parts of a strategic marketing plan. Each segment of the plan needs to be developed individually with the entire culmination of the plan in mind. In other words‚ each segment should be a link in the chain to a completed marketing strategy. The ultimate goal is to reach a successful culmination of all three tiers that will
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There are several differences between cost-based pricing and value-based pricing. In this essay we will consider a few of them. Value-based pricing is based on the customer’s perception of value rather than the seller’s cost as the key. Cost-based pricing is based on the product. A company comes up with an idea of what they think would be a good product and sets the price after considering all the production costs plus a target profit. (Kotler‚ Armstrong‚ 2008‚ p. 285‚ 286) Instead of starting
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$50. The stock pays a dividend of $5 in 3 months. A 6-month European put option on the stock has a strike price of $48 and a premium of $4.38. The continuously compounded interest rate is 8%. Calculate the premium for a 6-month European call option on the stock with a strike price of $48. * A 1.02 * B 3.36 * C 3.46 * D 4.38 * E 5.40 2 1. An "exchange call option" gives the owner of the option the right to give up one share of Stock A in exchange for receiving one share
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VIRGIN ATLANTIC GLOBALIZATION Virgin operates in the third era of Globalization (2000 onwards) where everything is connected through the Web. This means that Virgin use extensively Internet and other technological platforms to conduct its business. The Globalization of Virgin Atlantic contributed to capture the international market and to the improvement of the organization‚ but still there are some challenges experienced that influence the organization policies and the decision making‚ they
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An option for the poor does not mean that God loves poor people more than rich people. But it does mean that we may have to work harder to love others as Jesus has loved Archbishop Oscar Romero A modest and good man‚ he was mostly inclined toward books and theological study.( recognized the tragedy and devastation of the poverty of his native El Salvador) he identified the true causes--the political and economic causes-- what it means to be Catholic‚ what it means to be neighbor‚ and what it means
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MARKET SKIMMING PRICING: It is a pricing strategy in which a marketer sets a relatively high price for a product or service at first‚ then lowers the price over time. The purpose of such strategy is to make higher profits within the short run period in order to recover the costs incurred in product researching‚ manufacturing‚ marketing etc. because such costs associated with the product are high. However this strategy carries with it the risk of acceptance of the product in the market as other
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Our conscience is the best guide to what is right and what is wrong. Discuss (12 mrk) Some Christians believe that the conscience comes from the soul‚ and as God gives the soul to us‚ our conscience is the best guide to what is right and wrong. However other Christians believe that the conscience consists of an angel and a devil making it too unreliable to listen to as you could easily be shown the wrong bath. As well as this‚ some Theists and Atheist who may not believe in God may argue the
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Selecting a Pricing Method 3 major considerations in price setting : costs of production‚ distribution‚ communication set a floor to the price competitors’ prices and the price of substitutes provide an orienting point customers’ assessment of unique features establishes the price ceiling (plafond) Companies select a pricing method that includes 1 or more of these three considerations. We will examine 6 price-setting methods: Mark-up pricing‚ target-return pricing‚ perceived-value
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